I am coming back to an old theme – the notion of character in trading. Recently, I have heard several conservations about how to deal with a series of losses or an extended period of drawdown. The nature of these conversations all had something in common, whether there was a magic technique to help traders get through these periods of difficultly. I was going to produce a fairly long monologue on this topic but I kept looping back to the same point. The terrible answer I came up with is there isn’t a simple tool to get you through – what gets you through is the person you are.
All traders have periods that are complete rubbish where everything you do seems to turn to shit. This is the nature of trading – successful traders simply push through. This is character, you either have it or you dont.
It’s just like playing professional Tennis – work on reducing your unforced errors, always be honing your particular style of game and keep on going no matter what.
At some stage in the future I would also like to be endorsing a line of designer clothes and deodorants for Traders.
The person we are is largely determined by the quality of training we have done to become a trader, not our genetics. Whatever we achieve in life is because of who we are and we can learn the discipline, persistence and perseverance necessary to be competent traders from our experiences and mentors. It is only after trading for a few years that we truly understand what is meant by “80% psychology – 20% technique” (maybe with a dash of luck).